Here's the Breakdown for Canada October CPI, in One Chart

In October, Canada CPI rose by 2.0% from the previous year, marking an acceleration from September's 1.6% YOY rise. This less pronounced drop in gasoline prices in October (-4.0%) compared to September (-10.7%) contributed significantly to this uptick. Excluding gasoline, the CPI continued its steady climb of 2.2%, consistent with the growth observed in both August and September.

Looking at specific categories, goods experienced a marginal increase of 0.1% year-over-year in October, a recovery from September's 1.0% decrease. However, the rise in service prices slowed to 3.6% year-over-year in October, the smallest annual increase since January 2022. Over the last three years, goods and services prices have risen by 10.2% and 14.2%, respectively.

Monthly changes also showed the CPI increasing by 0.4% in October after a 0.4% decrease in September.

Food prices from stores climbed more rapidly in October, with a year-over-year increase of 2.7%, up from 2.4% in September. This marked the third consecutive month where grocery price growth outstripped overall inflation. Leading this trend were significant price hikes in other fresh vegetables (+7.3%) and preserved fruits and fruit preparations (+7.6%). However, the rise was tempered by smaller increases in fresh or frozen beef prices in October (+7.0%), compared to September (+9.2%), among other food items.

Year-over-year, the decline in gasoline prices moderated in October to -4.0% from -10.7% in September, partly due to a base-year effect and a 6.4% month-over-month drop in October 2023, driven by reduced refining margins and lower global oil demand. On a monthly basis, gasoline prices increased by 0.7% in October after a sharp 7.1% fall in September.

Shelter prices continued their trend of moderated growth, increasing by 4.8% year-over-year in October, slightly down from September's 5.0% rise. Contributing to this easing were softer increases in mortgage interest costs, which rose 14.7% in October compared to 16.7% in September. This slowdown has been evident since September 2023, following a peak in August 2023 (+30.9%).

Rent prices also grew at a reduced rate, with a year-over-year increase of 7.3% in October, compared to 8.2% in September.

As the market had already anticipated a rebound in Canada's CPI, and although it slightly exceeded expectations (forecasted at 1.9%), traders are still betting on a 33bp rate cut in December (between 25bp and 50bp), which is largely unchanged from before the data was released.

Source: Statistics Canada